Donnerstag, 29. März 2007

Buying up Berlin - the sale's on now

Investing in Germany Want a morgue, a TV tower, or Goebbels' rundown wartime lakeside love-nest? Derek Scally on why Berlin is auctioning off, well, everything

Fancy living in the former lakeside love-nest of Nazi propaganda minister Joseph Goebbels?
Or how about owning Berlin's television tower, the city's most recognisable landmark after the Brandenburg Gate?

It's sale of the century in the German capital. The invasion of foreign investors into the property market has boosted confidence here to the point where even the city government is opening its property portfolio, filled with long-hidden jewels and one-of-a-kind development opportunities.
All are sold at public auction, without advance guide prices.

"The Irish are hugely interested in everything we have and our property portfolio is extremely varied," says Anette Mischler of the Berlin Real Estate Fund (Liegenschaftsfonds, LFB), a state body set up in 2001 to sell off property owned by the city state of Berlin.

"Until our body was created, an unlucky would-be investor had to talk to up to 26 different government bodies. Now there is just one point of contact."

Nearly 18 years after unification, Berlin remains a one-of-a-kind property market. Unlike other cities, like Munich where the state owns less than 5 per cent of city property, over half of property in the capital belongs to the Berlin state government, the senate.

This legacy of East German state ownership is a costly burden in a city with debts of over €40 billion and so the government has consolidated ownership of all its property into the LFB. Its mission: to auction it all off.

"We've got everything: empty hospitals, industrial buildings, disused wartime bunkers. We sold a morgue the other day," says Ms Mischler.

Until now, all that was lacking in this property pick n' mix were willing, solvent buyers.
But Germany's economic recovery in the last 12 months has taken care of that. Now foreign investors are arriving in the capital in huge numbers, attracted by the quality, location and value of the properties up for grabs.

Perhaps the most curious "fixer-upper" on the LFB books is the "Waldhof" villa 40kms north of Berlin, dubbed "Goebbels' love-nest".

The Nazi propaganda minister used the villa, completed in 1939, to entertain the German film industry's leading ladies until the war spoiled his fun and his family was forced to move here from Berlin in 1943. Two years later the Goebbels family left the villa for their notorious swansong in Hitler's bunker.

The 100sq m (1,076sq ft) villa, with a livingroom overlooking the Bogensee lake, was remodelled after the war into a youth hostel for scouts and regularly housed GDR bigwigs, including the later Politburo chief Erich Honecker.

Now empty and rather shabby, the villa will need a good makeover from its new owners. Thrown in with the villa is 15 hectares (37 acres) of forest grounds.

Back in central Berlin, and just about to come on the market, is the Alte Manze (Old Mint) located in the eastern city centre just behind Alexanderplatz and Berlin's landmark "Rotes Rathaus" town hall.

Another landmark building up for auction is the Lapidarium, located directly on the Landwehr Canal near Potsdamer Platz. The building has a varied history - it was Berlin's first pumping station in the 19th century and Andy Warhol held wild parties here in the 1980s. Today the building is home to city statues that are surplus to requirements.

The LFB has no shortage of undeveloped sites of interest to property developers.

Cream of the crop is the Humboldthafen (Humboldt Harbour), opposite Berlin's new main train station and just 200 metres from the Chancellery and the Reichstag.

Investors are being sought for a 110,000sq m (1,184,029sq ft) waterside mixed-use residential and commercial development surrounding the harbour basin and the LFB has just begun to release onto the market the first of nine sites, varying from 3,900-23,000sq m (41,979-247,569sq ft).

"There is no other city in Europe with such huge sites in a central location on the open market, only in Berlin," said Ms Mischler.

Another site about to come on the market is on Hausvogteiplatz, near the foreign ministry and just behind Unter den Linden boulevard. It's expected to be turned into a development of townhouses, similar to another popular development nearing completion on a neighbouring site. Perhaps the LFB's most sought-after sites at the moment are a 24,000sq m (258,333sq ft) area of development property in the embassy district facing the Tiergarten park.

"People are snatching those sites out of our hands," says Ms Mischler.

She warns that much of the agency's high-yield property has already been sold off, making the property on offer more suitable for mid-to-long-term investment.

But the ongoing inventory process of Berlin's state-owned property agency means that the LFB doesn't know what it will have to auction off in the months and years to come, and recommends that potential investors make contact.

Last year the agency sold property worth €280 million and already 2007 looks like it's going to be a record year.

One landmark object not being sold by LFB which has just come on the market is the landmark Television Tower, a Sputnik-like monument to superior Communist engineering built in 1969.
Paddy Power bookmakers is already speculating that Coca Cola will buy the tower, worth an estimated €40 million, from its current owner Deutsche Telekom.

"The television tower is the ideal advertising hoarding for the company," said Paddy Power, "high above the roofs of the city, popular with Berliners and a popular tourist attraction."

But Berlin officials have rejected the idea of using the 368-metre tower for advertising purposes, making it unclear what the new owners are expected to do exactly with their new plaything. But with a fantastic viewing deck, a retro bar and revolving restaurant, anything goes . . .

Werner Jenke


00 49 30 22 33 69 72 werner.jenke@liegenschaftsfonds.deMr Kai Renken
00 49 30 22 33 66 95© 2007 The Irish Times

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